New rental income project with an 8% average annual dividend!
We present a new project! Next Friday, the 10th, at 12 p.m., we will open our rental income project for funding in partnership with Holdensland. This time, we offer you the opportunity to invest in a rental income project with an average annual dividend of 8%.
The Manuel Luna project involves the acquisition and transformation of a commercial space into 7 tourist apartments, their lease, and subsequent sale to a real estate investor. The asset is located in the Tetuán neighborhood (Madrid), specifically at Manuel Luna Street 8, next to one of the city’s main tourist attractions, the Santiago Bernabéu Stadium. It is a well-established residential area with all kinds of services.
For this project, we are collaborating with Holdensland, a business group with more than 15 years of experience in renovating spaces of similar characteristics.
8% annually for 5 years
Like all our rental income projects, the Manuel Luna project has an equity structure. Both the promoter and Urbanitae investors will make a capital contribution to the project’s special purpose vehicle. These contributions will enable the complete development of the project, including the acquisition of the asset, its subsequent renovation, and all related costs. The operation is not expected to rely on bank financing. The contribution from Urbanitae investors will be equivalent to €1,040,000.
The project has a duration of five years, and it is estimated that it will generate an average annual dividend of 8% from the completion of the construction and the start of activity by the operator. Dividends will be distributed quarterly (in natural quarters). If the cash flow allows for a dividend greater than 8.00%, the surplus will remain as retained earnings in the company and will be used for future distributions. In case the cash flow is insufficient to distribute the 8.00%, the maximum available cash will be distributed, always respecting a minimum cash balance equivalent to two months of rent. The first dividend payment is expected in the first quarter of 2025.
In this video, Ángel Pérez, director of Holdensland, and Diego Bestard, CEO of Urbanitae, explain the key aspects of the project.
Lease agreement with Dobo Homes
The tourist apartments will be operated and managed by Dobo Homes, a company with over 5 years of experience in managing tourist apartments and currently managing more than 150 units in 6 locations in Madrid and Toledo.
The project has a duration of 5 years, with quarterly dividend payments planned. In the fourth quarter of 2023, the capital increase by Urbanitae investors and the acquisition of the commercial space through the formalization of the sales contract are expected to be completed. The construction is expected to be completed and the tenant to move in during the fourth quarter of 2024. The first dividend payment is estimated for the first quarter of 2025. From then on, a payment will occur every 3 months until the divestment event. In the fourth quarter of 2026, a divestment opportunity for the asset will be opened if market conditions are favorable. Finally, in the fourth quarter of 2028, divestment, liquidation of the company, and distribution of remaining profits to the investors are expected.
As always, you can reach out to us with any questions about the project at contacto@urbanitae.com or by calling (+34) 911 23 25 22.